Field delivery trucks are at Farmers Union Oil of Southern Valley in Fairmount, N.D. The trucks carry GPS devices that the home office uses to direct and monitor activities for better efficiency. (Mikkel Pates / Agweek)

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FARGO, N.D. — A Fargo, N.D., company is making its mark with a technology called “machine-to-machine,” or “M2M.”

This is a revolution that is changing the way co-ops do business with farmers and suppliers, keeping track of equipment and machines in real time.

Pedigree Technologies uses military-grade equipment at affordable prices to help agricultural cooperatives and others that serve farmers operate more efficiently, and at less cost, deepening relationships between service center and customers.

The “Pedigree Technologies OneView” system provides what sometimes is called “real-time operational awareness,” meaning co-op managers can keep track of the whereabouts of fleets of trucks and fertilizer application equipment, but also do things like automatically generating necessary government reports or on-the-go calculations of vehicle taxes and driver logs in each state a vehicle travels.

Using this kind of technology, a co-op fertilizer applicator can warn the home system when it is running low on fuel or materials. It can be for just-in-time refilling of fuel and materials refilling and — yes — even order its own servicing and link with the accounting system to pay for it.

Alex Warner, 37, the company’s president and chief executive officer, grew up on a Hillsboro, N.D., farm He graduated from high school in Halstad, Minn., acquired a degree in agronomy/plant sciences and minor in speech/communications from North Dakota State University in Fargo. He served an internship with DuPont Ag Chemicals Division in Minnesota before returning to the farm for a couple of years. Eventually, he went on to St. Cloud, Minn., and earned a degree in information systems (business/computer science) while his future wife, Leah Sonstelie of Winger, Minn., was in law school.

He launched Pedigree in 2003, first as a military contractor, in its “sense and respond” logistics.

In the past few years, it has shifted into the dynamic world of the private sector — first in oil and gas and then into agricultural cooperatives. They figure their systems already serve about half of the agricultural cooperatives in North Dakota and 30 to 40 percent of the major co-ops in South Dakota. Some co-ops are using them to track more than 100 vehicles, while others use them on as few as ten trucks.

Warner says his company has 200 percent composite annual growth rates, but profitability statistics are private. Pedigree was named one of the top 100 “M2M companies in the world” by a trade publication that since has been renamed “Connected World.” The company is in the top 33 in the systems software category.

Among the 50 or so employees is Joe Nicholas, another NDSU graduate, who is both doing direct sales and is director of business development. Nicholas says the company is branching out. He estimates market share of about 10 to 20 percent of the co-ops in Minnesota and is moving into Kansas, Nebraska and Iowa, and beyond to Texas, Tennessee and elsewhere.

Agriculture — a natural

Warner farmed full- or part-time several years until his father retired in 2001 and rented out the land and joint-ventured the beet shares.

“I still feel like I miss the farm, and I still like to go back to my friends on the farm,” he says.

In 2003, the company gained attention with an early pilot project sugar beet pile monitoring sensor system for American Crystal Sugar Co. The beet co-op, where his father had served as a board member, tried some Pedigree technology as one of the ways it constantly monitors piles for hot spots and spoilage. That project ran its two-year course. Crystal uses infrared aerial photography and a variety of other techniques to monitor beet piles.

The project caught the attention of the military, which was interested in “net-centric warfare — using sense and respond surveillance and logistics.” The military wants to see its whole operation in real time. In 2007, Pedigree was awarded an $8.4 million contract with Naval Air Systems Command, with support from former Sen. Byron Dorgan, D-N.D., and Sen. Kent Conrad, D-N.D., among others.

Their software worked with ground sensors hidden in the background on the battlefield can be used to monitor the battlefield and enemy movement, as well as supply chain. The devices could be used to get into areas that unmanned aerial vehicles or UAVs, cannot. The company is working on future contracts with the military, but also expanded into commercial market.

In 2009, the company turned to the commercial sector in general and agriculture in particular. They started with oil and gas sensing and logistics and then into the ag cooperatives that sometimes supply them.

Oil and gas service companies in the northwest North Dakota and Montana, as companies move drilling fluids and water byproducts, as well as repairing and maintaining equipment.

“Lots of problems we solve in agriculture have similar applications in other industries,” Warner says.

Farstad Oil Inc. in Minot, N.D., was one of Pedigree’s early customers, using the technology to manage oil and gas distribution. Other clients include Northern Plains Cooperative of Gettysburg, S.D., with its locations in Gettysburg, Dupree, Eureka and Selby, and Southern Valley Cooperative based in Fairmount, N.D., to name a few.

Family connections

In 2009, Nicholas, who grew up in a Cando, N.D., farm operation, joined Pedigree. He and Warner had been friends since they were young children. Nicholas, another NDSU graduate, had been working in high-end equipment sales and saw opportunities for Pedigree in agriculture.

Their fathers, Mike Warner and Gene Nicholas, are longtime friends and business associates in the region’s pasta industry, among other things. They, and others from the pasta days, are financial partners in Pedigree and serve on its board of directors.

Pedigree’s technology works in a variety of industries, but 40 to 60 percent of Pedigree’s business involves agriculture-related clients, some with oil and gas distribution.

“Co-ops have grown from the mom-and-pop operations to billion-dollar organizations over the past 20 years,” Alex Warner says.

“We’re making software for operations people,” Warner says. “When you have lots of equipment and only so much time to get out there while the weather allows, it’s a big deal to make sure everything’s running. We help co-ops coordinate those activities efficiently, in a way to cut costs. They can maximize what they do when it goes into the field.”

One area of special help for co-ops is regulation compliance and reporting.

The International Fuel Tax Agreement is a prime example. It requires that when moving equipment across state lines, companies must keep an accounting of they’ve miles they’ve driven in each jurisdiction. Appropriate fuel and road taxes are different in different states. Conventionally, drivers must write down information on reports to make sure it gets done, and then people back at the office must accumulate it and file it.

“My hometown’s Halstad Cooperative is doing business across state lines,” Warner says. “Our system will automatically calculate all of those miles, push it into a report and send it out to a compliance agency — done! — where it was a big hassle in the past. One client said it took three or four days of paperwork to submit reports to the state of North Dakota for IFTA, where now that one person is able to get it done in three to four hours.”

Untold opportunity

On another level, information in the system can tell managers where a propane tank may be stranded in a blizzard, or tell them whether the trucks are driving safely or obeying speeding laws. This can be important to get cost-effective insurance rates.

In one case, a client had reporting devices on a truck that became involved in a crash.

“When people try to recreate what happened, we can help them do that,” he says.

A little black box determines when brakes were applied, for example, and what the speed was when it happened. Some of the information can be obtained from on-board computers.

Machines can offer their own maintenance warnings. They can ask for a maintenance tech to come to the field and even which parts to bring before they’re dispatched.

Cooperatives using this kind of technology to tell operators what to spray and how to spray it, using “tablet”-style computers. Reports go back to agronomists, who tell them where they need to go next, and what to place, and using GPS coordinates, all directed by Garmin-style directions.

Pedigree attaches devices on-board in a nurse tank, for example. The device runs on batteries and communicates over cell phone, telling the tank’s location and what’s left in it so that someone can be in the right place at the right time to drop off another one.

A number of competitors offer software solutions for logistics, but Pedigree offers a wider breadth of interactions.

“We take it a step further, doing coordination of anhydrous nurse tanks, locating them one to two times a day, but knowing when the nurse tank gets down to 25 percent full,” Warner says.

A timely refill can be ordered, and the farmer and cooperative can get out there and sell more anhydrous.

The reporting from these machine devices comes over the Internet over any network, but reported cell phone signals or via satellite or a wireless Internet system. The machines can be set to report more or less constantly, or on intervals to save signal time and money.

The monthly bill

Warner and Nicholas say the technology isn’t as expensive as customers expect.

Each machine being tracked requires some hardware, but some of that already is in place. Of course all of the hardware is “ruggedized,” or meets military standards for resistance to grease, dirt and weather.

The company uses an analogy between software and a hand drill, which comes with different bits for different jobs. Each separate application is interchangeable — something like a new drill bit.

“We can sense, track or monitor anything,” Warner says. “We’re ‘hardware-agnostic.’” Warner says, meaning they’ll work with almost any kind of satellite network and any kind of equipment.

“We give you the hardware to put on a tank or nurse truck, and lock you into a two- or three-year contract with software,” Warner says. “You pay so much a month.”

If a co-op has 30 trucks, for example, they might pay $40 per vehicle in hardware for each. If they pay $1,200 a month in software costs that might cover 30 vehicles, the hardware cost can be rolled into the monthly cost.